Northern member states want to limit EMU reforms

A group of eight northern EU states want national governments to retain the upper hand on Eurozone reforms and curb the ambitions of French President Emmanuel Macron to move towards a more federalised European Union.

Finance ministers from Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands, and Sweden underline their shared views in a discussion on the architecture of the European Monetary Union (EMU) in a short note stating that the bloc should avoid further “far-reaching transfers of competence to the European level”.

According to the ministers, any changes to the EMU should focus on real needs. The northern countries are attempting to use their strong economic leverage within the EU to head-off a potential Franco-German axis that may emerge as more institutional reforms are discussed.

The move would challenge the European Commission’s plan of far-reaching reforms that include a newly-created position for a Eurozone finance minister and elevating the European Stability Mechanism (ESM) to the level of a European Monetary Fund (EMF).

The group of nations’ statement came only a day before the Vice-President for the Euro, Valdis Dombrovskis, is set to present the first EMU package on behalf of the EU executive.

“Any further deepening of the EMU should stress real value-added, not far-reaching transfers of competence to the European level. For that reason, the discussion on the deepening of the EMU should find a consensus on ‘needs’, instead of focussing on ‘wants’,” the finance ministers’ statement reads.

The added that priority should be given to areas with the greatest convergence of views between the Member States, notably on the completion of the Banking Union, and the transformation of the ESM into a European Monetary Fund.